Land deal-funded $200b fast rail is 'potential trainwreck'

Former Victoria Premier and Chairman of Cbus Super
Steve Bracks backs the latest plan for a fast train service from Melbourne to Sydney
Pictured on April 13, 2016 in Melbourne, Australia. (Photo by Wayne Taylor/Fairfax Media)
Wayne Taylor

by
Ben Potter

Transport experts have dismissed the latest plan to build a fast rail system between Melbourne and Sydney as a potential "financial trainwreck" that fails the economics test because of high costs.

The plan from Consolidated Land and Rail Australia would be funded by speculative land deals aimed at turning rural land worth $1.2 billion into residential lots worth $180 billion.

"It appears that this latest fast train proposal is driven by funding opportunities from higher land prices which can be highly speculative and unreliable," said Garry Bowditch, head of the Better Infrastructure Initiative at Sydney University.

Nick Cleary, chairman of Consolidated Land and Rail Australia, the company pushing the $200 billion plan to build eight new "smart cities" along the fast rail route, said it would be funded entirely from land deals and not need public funding.

Mr Cleary said rural land along the route, which runs via Shepparton, Victoria – the first stage – and Gundagai and Goulburn in NSW to Sydney, could be bought for about $1000 per block and sold for about $150,000 a lot.

Transport experts are sceptical of the plan. "You'd have to say it doesn't look like anything more than a property development idea," one expert said.

"It's very hard to see it being at no cost to the government. They [fast rail proposals] have required massive public subsidies and even if they don't, someone has to buy the property."

Brendan Lyon, chief executive of Infrastructure Partnerships Australia, a lobby group, said, "High-speed rail has been on the table many times since the mid-'80s, but has always failed because of high costs and the complexity of getting the long, straight corridors needed for high-speed operations.

"High-speed rail is uniformly popular in the community but the economics make it hard."

Victorian Public Transport Minister Jacinta Allan said she hadn't been briefed on the plan and the government would have to look at it along with others. She said faster rail services had previously led to "a boom" in regional public transport but rail was expensive and financing it was challenging.

The Greens, which took a publicly funded fast rail plan to the election, said a cross-generational project like the fast rail should be built in the nation's interests, "not to suit the profits of private property developers", and be led by federal and state governments.